Corp/ contract pilot liability

[BGSM]

For those of you flying contract work do you set up an LLC for liability reasons? I fly nothing but contract work for one company.

 

[DieselDragRacer]

For those of you flying contract work do you set up an LLC for liability reasons? I fly nothing but contract work for one company.

As a small business owner with low millions in wholesale sales YTD let me ask you this question:

Do you honestly believe paying legalzoom.com or your secretary of state ~$75 magically shields your personal assets when you, as the primary shareholder who is also personally involved every single business day in his business can't be both professionally and personally sued if you forget one day to put the gear down on approach?

The biggest lobbyist in the US are trial attorneys and you honestly believe $75 even $1000 in fees to form an LLC or INC keeps a trial attorney who now has judgment against you the sole/major shareholder, who plays a major role in the day to day business of his Mickey Mouse corporation, can't pierce the thin corporate vail and come after your home , 401K or whatever?????

Granted, it varies a little by state which is why your book cooking CEO's like states like Florida but let me let you in on one of many $300/hr attorneys meeting between 3 small, honest, hard hitting, NO BS, non-media whore law firms over the last 3 months (they obviously didn't work non-stop on my corporate/estate issues):

If you have a corp in GA which you have day to day participation and decision making the business is on the line and personally "they can take everything but your filling including retirement funds."

Now, in GA if you are married and your wife has nothing to do with your corporation they can only take YOUR 1/2 of the equity (you get to keep up to $4500) in your home but you wife gets to keep her half.

I do know in GA college accounts for kids/grandkids can't be touched by a judgment and the funny thing is you can put money in these in GA w/o telling the recipients it even exists.

Another option in GA is IF and only IF you have 100% confidence in your wife put everything from the home deed to the retirement funds to all but one car in her name. The only thing you keep in your name is your primary vehicle which you get a $4-5 mil personal liability umbrella for about $300 per year. That way if you rear end and really hurt someone their bus stop ambulance chasing attorney quickly figures out the only thing in your name is a wrecked vehicle and $4-5 mil umbrella which they know is a walk in the park to get from the ins company. When these slime bags see 40-50% plus expenses on a $4-5 mil policy and they tend to push settlement real quick.

If you aren't married and have a pot to piss in and a window to throw it out of mom, dad or sibling is an option but could be as much as risk as singing everything over to your wife.

Since I'm not an attorney, every state is different and I probably forgot a few lessons learned this summer let my post simply open your eyes.

I will tell you this for certain: Just because your buddy at church or the bar who is a DUI or closing attorney or your bookkeeper/accountant/CPA/college Business Law professor said a corp protects you personally doesn't mean THEY AREN'T IGNORANT and you don't need to seek 2nd opinion from a legit and real civil attorney.

Think about it this way: If you and your corp do something stupid do you honestly think a ~$75 piece of paper filed with the state protects your personal property?????

If so I have this cool bridge for sale BTW......

 

[svcta]

Diesel, my man, he only asked a question. I think we can all do without the d!ckheadedness. It's a legit question that deserves an honest answer without trying to make yourself look like Joe Toocoolknoitall.

Posts like this are the reason F.I. is losing traffic. That and all the freaking ads....like to give me a seizure with all the blinking.

Back to the point...what are people's opinions about the benefits of having an LLC set up around your contract flying?

 

[cvsfly]

Something I want to know more about, too. I do appreciate Diesel's reply if only it can be a little more constructive. In this world of lawyers, anyone can be sued. I've heard an LLC won't protect your personal wealth or give much protection from getting sued. But let's hear what it does do for you - organization, taxes, insurance? When should one think about putting assets into a spouse's name? What other protection instruments do contract pilots use - leagl contracts vs hand shakes, waiver of suborgation (sp?), named insurured vs open pilot warrenty, etc? Anyone want to share an employment contract? I've suddenly started contract work and I am trying to figure out how to approach the subject with the client without scaring them off.

 

[400A]

In my opinion, a 1 million dollar umbrella policy is a good idea.

 

[Hawker800]

Can't the aircraft owner put you on the insurance policy as a "named insured". That way you have liability protection. Not the open clause thing either.

 

[AC560]

LLC's provide some degree of shelter but will not protect you if you personally injure someone, are intentionally reckless, etc. There are variations state to state as mentioned previously as well.

Your best bet is to find a professional lawyer who specializes in aviation to discuss the various ways to protect yourself and your assets. You wouldn't go on a Microsoft Flight Simulator forum to ask how to fly a 747, asking specific legal advice on a pilot forum is akin to the same thing.